Ukraine prepares to hold elections

Good morning and welcome back. In today’s newsletter:

Ukraine plans election and peace deal referendum in May
Elliott Management builds London Stock Exchange Group stake
The airlines fighting the expansion of Heathrow airport
A breakthrough in battling cognitive decline

We begin with Ukraine which, under US pressure, is preparing to hold elections within the next three months.

Here’s what we know: The Trump administration pressed Kyiv to hold presidential elections alongside a referendum on any peace deal with Russia by May 15 or risk losing proposed US security guarantees.

The move, according to Ukrainian and western officials and others familiar with the matter, comes amid intense pressure on Kyiv by the White House to wrap up peace negotiations between Ukraine and Russia in the spring.

The plan aligns with a US push, outlined by Volodymyr Zelenskyy to reporters last Friday, to have all documents signed to bring Europe’s largest conflict since the second world war to an end by June.

Ukrainian and European officials as well as others briefed on the matter say Zelenskyy intends to announce the plan for presidential elections and a referendum on February 24, the fourth anniversary of Russia’s full-scale invasion.

Why it matters: Holding an election would mark a political pivot for Ukrainian leader Volodymyr Zelenskyy, who has repeatedly argued that such votes are impossible while the country remains under martial law, millions of Ukrainians are displaced and about 20 per cent of the country is under Russian occupation.

But the plan underscores Zelenskyy’s desire to maximise his re-election prospects while reassuring Donald Trump that Kyiv is not slow-walking a peace deal if one can be reached.

The US president has indicated to Kyiv that American security guarantees are contingent on agreeing the broader peace deal that would probably involve ceding the Donbas region to Russia, and which Washington wants done before the May 15 deadline. Read the exclusive story.

Warning from Estonia: Russia has increased its production of shells so much it is “in effect, preparing for its next war”, the Baltic state’s spy service has warned.

Here’s what else we’re keeping tabs on today:

Economic data: The Labor Department’s Bureau of Labor Statistics is scheduled to release its monthly employment report and update the unemployment rate.
Results: Networking equipment maker Cisco Systems reports second-quarter results. McDonald’s, Kraft Heinz, Humana, Albemarle and International Flavors and Fragrances report fourth-quarter earnings.
IPOs: Brazilian fintech Agibank and Solar contractor SOLV Energy will go public in New York.
US-Israeli relations: US President Donald Trump hosts Israel’s Prime Minister Benjamin Netanyahu at the White House.

The FT’s management editor Anjli Raval will be answering readers’ questions on the challenges confronting CEOs and boards on Thursday. Post your question ahead of time here.

Five more top stories

1. Activist hedge fund Elliott Management has built a significant stake in the London Stock Exchange Group, as the UK company contends with fears over disruption from AI and a lacklustre listings market. LSEG, which has a market value of £38bn, was caught up last week in the broad sell-off of data and software companies. Read the exclusive story.

2. Nine people have been killed and 25 injured in one of the deadliest mass shootings in Canadian history. Police said they were called to Tumbler Ridge Secondary School in British Columbia, a small town 1,100km north of Vancouver, yesterday afternoon. Here’s the latest.

3. The House of Representatives has rejected a rule pushed by Republican leaders to prevent votes challenging Donald Trump’s tariffs, in a significant rebuke of the president and his allies in Congress. All Democrats and three Republican dissidents voted against the measure.

More US politics: Howard Lutnick said he visited Jeffrey Epstein’s island with his family in late 2012, at a Senate hearing yesterday.
More Epstein news: Jeffrey Epstein paid $100mn to Victoria’s Secret boss Les Wexner in 2008, according to a report by US prosecutors.

4. Syria plans to tap energy majors TotalEnergies, Eni, Chevron and ConocoPhillips to help explore “trillions of cubic metres” of undiscovered oil and gas, according to the head of its national oil company. Read details of the exploration licences talks.

5. Activist investor Ancora Holdings has taken a $200mn position in Warner Bros Discovery and intends to oppose the Hollywood studio’s agreed $83bn sale to Netflix. Ancora is expected to argue that WBD’s board has not given adequate consideration to a rival bid from Paramount.

Today’s big read

Montage image of aircraft and air traffic controllers — © FT montage/Dreamstime

Airlines are saying that the £33bn plan for Heathrow’s new runway and terminal is unaffordable. The London airport says the carriers just want to keep out competitors who are desperate for new slots. Read more on the tussle over Heathrow’s expansion.

We’re also reading . . .

Why Maga loathes London: The myth of the UK capital as a third-world sinkhole is now central to Maga politics, writes Edward Luce.
Olix: A 25-year-old British entrepreneur has raised $200mn for a secretive semiconductor start-up aiming to build AI chips that are faster and cheaper than Nvidia’s.
Market Insight: Small caps belong in your portfolio, argues Wes Crill, vice-president at Dimensional Fund Advisors.
Turkish drama: The country’s soap operas, which have hooked TV audiences worldwide, have become a parable of the economy’s woes.

Chart of the day

Why are fertility rates collapsing? Explanations for dropping birth rates — a far higher number of children surviving into adulthood, separating the joys of sex from the burdens of child-rearing and people preferring a few “quality” children — don’t fully explain what is going on, says Martin Wolf. The markedly lower fertility rates of graduate women is another factor, he says.